Combative Grocers Are Fighting Battle of Britain

That's especially clear to those following social media. In contrast to U.S. supermarket posts on Twitter, which are confined to disseminating deals and testimonials to consumers, U.K. supermarket tweets sometimes take direct aim at the competition.

Here's what followed on Twitter in the wake of Tesco's price strategy shake-up late last month that inaugurated 30% off more than 3,000 items.

A PR official at rival Asda tweeted, “Hi Tesco. 1 word. Yawn. We were 10% better value yesterday. We are today. And we will be on Monday. That's why we have a price guarantee.”

Sainsbury's press office weighed in with other choice words: “This is classic smoke and mirrors from Tesco. … It is no surprise to us that Sainsbury's price match policy, together with a stronger own brand offer, has forced Tesco to take this kind of action.”

And this month, after Sainsbury rolled out a new price program called “Brand Match,” another Asda PR person countered on Twitter: “Bear in mind how much more expensive Sainsbury's is compared to Asda. I wonder how much this rollout is going to cost them?”

This kind of combative dialogue isn't just limited to retailer press departments. For example, here was Sainsbury's CEO Justin King downplaying Tesco's price drop strategy in a media story this month: “That's clearly a response to their poor performance. … We have a winning approach.”

Why are U.K. grocers so contentious?

Bryan Roberts, London-based director of Retail Insights for Kantar Retail, who focuses on Europe, the Middle East and Africa, points out a major reason: “We have a truly national industry here, where all six major players compete with each other across most parts of the U.K.”

Moreover, three of the biggest players have ecommerce operations, which means price transparency is greater now than ever, a fact that fuels aggressive price claims on the Internet or at the store shelves, adds Roberts.

Could the U.S. industry ever adopt this more aggressive tone? While it may happen in spots, it's hard to imagine this taking place on a widespread basis unless there is more consolidation that creates national players going head-to-head.

So be careful next time you use the term “price war” for U.S. markets. Things could be a lot worse.